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Mapping Innovation Policy in Turkey


Turkey, 22 September 2017

Project Description

According to European Commission's 2016 Innovation Union Scoreboard, Turkey falls within the group of moderate innovators (innovation performance 51 per cent of EU average). Turkey is performing well below the average of the EU for all dimensions except "Firm investments" – due to high relative performance in Non-R&D innovation expenditures – and on almost all indicators. Although Turkey has enjoyed a significant increase in R&D spending, the level of spending remains low and mostly dominated by public expenditures. There is continued emphasis on the need to increase commercialization of public research in order to reap the full benefits of R&D investments. Most importantly, domestic firms are not the main drivers of innovation, possibly because foreign direct investment targets above-average productivity firms and domestic firms have low management quality. Private sector R&D is dominated by existing firms and activities, whereby growth in R&D investment takes place mostly on the intensive margin.

Recognizing development and use of technology as the main driver of increased productivity and competitiveness, the Turkish government placed high emphasis on innovation policy in the 10th Development Plan (2014-2018) which was approved in July 2013. The plan recognizes that a comprehensive framework covering incentives, SMEs, intellectual property rights and ICT policies is essential for an innovation-enabling environment. As part of its overall investment policy, the Government uses a variety of instruments to support innovation, including through its R&D Law, its Support for Technology Development Zones, Industrial Thesis (SANTEZ) Program, support made by TUBITAK (Scientific and Technological Research Council of Turkey), and the loans made available through TTGV (Scientific and Technological Research Council of Turkey). The Government's emphasis on innovation has been renewed recently, with important policy developments, such as the approval of the new IPR law.

The European Bank for Reconstruction and Development ("EBRD" or "the Bank") is planning to strengthen and streamline its approach to support innovation and innovation policies in Turkey, building on the experience accumulated through its investments in the corporate sector and its policy engagement in the country. The renewed approach will be based on three building blocks: (i) a policy dialogue agenda to pursue with the Government to contribute to the improvement of policies in support of innovation; (ii) an operational framework to streamline the Bank's investments in innovation for mid-caps and large companies across different sectors of the Turkish economy; and (iii) a framework to support innovation investments in SMEs both directly and through financial intermediaries.

Assignment Description

Against this background, the EBRD is seeking to engage a consultant (the "Consultant") to support its strategic approach to innovation in Turkey (the "Assignment"). The Consultant is expected to support the Bank in implementing items (i) and (ii) of the described approach. In particular, the Consultant is expected to support the Bank in devising an operational framework to streamline innovation investments in mid-sized and large corporates across different sectors of the Turkish economy. In parallel and in support of its investment strategy, the Consultant will advise the Bank for the definition of a credible policy dialogue road-map and agenda in the area of innovation policy.

The objective of the Assignment is twofold:

  • Assist the Bank in the identification of potential areas for policy engagement with the Turkish Government, with the objective to promote innovation policies in line with best international experience.

  • Assist the Bank in the definition of operational approach to streamline investments in innovation by mid-caps and large companies across multiple sectors of the Turkish economy

The selected Consultant is expected to provide the following services:

Support the Bank in the identification of potential areas for policy engagement with the Turkish Government

In order to support the Bank in the identification of potential areas for policy engagement with the Turkish Government, the Consultant will carry out the following tasks:

  • Provide a comprehensive analysis of innovation performance and innovation challenges in Turkey, based on a critical summary of existing analytical work produced by international organizations, academia and think-tanks;

  • Provide a summary of existing Government's policy initiatives in Turkey in support of innovation, with a focus on any impact evaluation available and on recent trends and current priorities;

  • Ensure that the analysis of innovation performance, challenges and policy measures includes, but is not limited to, the following aspects:

  • a description and evaluation of the existing regional disparities in innovation performance in Turkey and existing policies to address such gaps

  • an analysis of the country's readiness for the Industry 4.0 revolution, together with a description and assessment of current policy initiatives adopted by the Turkish Government to support the advent of Industry 4.0

  • an analysis of the multiple current initiatives adopted by the Turkish Government in support of industry-academia cooperation on innovation, in particular with reference to existing ex-post evaluation studies measuring the impact of Government's policies

  • an analysis of value-chain integration of R&D and innovation activities, related challenges and policy choices

  • Ensure that the analysis of innovation performance, challenges and policy choices is comparative, whereby the experience of Turkey is compared with an appropriate set of peer countries within and outside the EBRD region;

  • Provide a description of existing areas of cooperation between the Turkish Government and relevant stakeholders, including international organizations (such as the EU or the World Bank), business associations (such as TOBB, Tusiad etc.), and relevant academic institutions and think-tanks;

  • Work with EBRD on identifying a road-map for the Bank's dialogue with the Government on innovation policies – the road-map should include: (i) the definition of the areas identified as most suitable for policy dialogue; (ii) an initial description of potential policy outcomes that the EBRD may want to promote in the selected areas; (iii) the definition of an operational approach (strategy, tools etc.) to pursue the policy dialogue agenda.

Assist the Bank in the definition of operational approach to streamline investments in innovation in Turkey

In order to support the Bank in the definition of operational approach to streamline investments in innovation in Turkey, the Consultant will carry out the following tasks:

  • Undertake a benchmarking study of the existing research and innovation schemes developed by the other IFIs in middle income countries such as Turkey including review of the previous work that the EBRD has undertaken in Poland.

  • Conduct a gap analysis to identify potential investment opportunities in innovation in Turkey which may have the potential to address the identified gaps in the innovation ecosystem. The analysis will be economy-wide. However, it will focus on mid-large companies and a limited number of sectors will be chosen for an in-depth assessment.

  • Ensure that the gap analysis of potential investment opportunities include, but is not limited to, different dimensions, such as: investments that promote adoption of Industry 4.0 related technologies; investments that promote value-chain integration of R&D and innovation activities and industry-academia cooperation; investments that maximize potential spillover and systemic effects across different regions

  • Propose a set of instruments, beyond direct financing, that may support the effectiveness of the proposed framework, such as specific technical cooperation, support to technical/market due diligence, concessional components to address well-identified market failures etc.

  • In light of the above analysis and of the assessment of the Bank's potential pipeline, suggest a set of conditions/eligibility criteria that could be used for EBRD's innovation financing framework.

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